Private clinic prices probed

The high costs of private hospitals and the three companies that manage most of the country's 97 medical aid schemes are expected to be scrutinised by the Competition Commission, says healthcare economist Nicola Theron, managing director of research company Econex.

Last year it was announced that the commission would investigate private healthcare costs.

Yesterday a provision inthe Competition Amendment Act came into effect, granting the commission the power to conduct a healthcare pricing inquiry and subpoena witnesses.

Private hospital prices increased by 300% between 1994 and 2010, says Theron.

Three hospital groups - Life Healthcare, Netcare and Medi-Clinic - hold 85% of the market.

Th ough the commission has allowed the hospitals to merge, it has expressed concern that the consolidation of the three main players has reduced competition in the sector.

Healthcare economist and Wits Social Chair Professor Alex van der Heever also blamed the rising hospital costs on the lack of competition.

"The hospital groups do not compete on cost, quality or efficiency. They never have and the situation has deteriorated," Van der Heever said.

Board of Healthcare funders spokesman Heidi Kruger labelled the three groups "an oligopoly".

"[That's why they] can charge what they like."

The government might want to reduce the prices of private healthcare as it hopes to contract private facilities for the public sector as part of the roll-out of the National Health Insurance.

S A Medical Association chairman Dr Mzukisi Grootboom said that, although private healthcare in South Africa was considerably more costly than public healthcare, it was not expensive by international standards.

However, Grootboom agrees with research showing that private hospitals and the administrative costs of managing medical aid schemes are responsible for rising prices.

If the commission discovers anti-competitive practices, it will have the power to refer those responsible to the Competition Tribunal that can set fines.

The competition commission can also suggest policy changes to the Department of Health.

Hospital Association of Southern Africa spokesman Dumisani Bomela said more people were using private hospitals more often, leading to increased expenditure on private hospitals.